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Large firms feel squeeze on fees

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18th Jun 2013
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Most top 100 accounting firms are under pressure to do more work for lower fees and are finding it difficult to sustain growth through greater cross-selling, according to CaseWare.

In April the accounts production specialist conducted a quarterly survey among the top 100 firms on their attitudes towards growth, fee pressure and how technology is changing the profession. 

The survey found that 75% of firms were trying to increase sales while controlling costs as a means of growth.

Yet more than half of the 115 accountants who responded reported that clients were putting “strong pressure” on their firms to reduce audit and accountancy fees. A similar number said that if forced to renegotiate with clients, they were ultimately prepared to reduce fees.

In the face of such strong fee pressure from cash-strapped clients, CaseWare managing director Simon Warren said that if firms don't take steps to do more work for lower fees, they face a reduction in the profitability of audits.

Measures firms can take include more automation, holding meetings via video conferences rather than travelling to clients and looking for ideas from other businesses. Boosting new business development and increasing sales to existing clients could also offset any fee reductions, while around 11% of respondents said their firms were considering mergers and acquisitions. 

But the survey also identified a discrepancy in how growth tactics are communicated to accountants, with many saying they don't know if a particular method is successful.

At the minimum it shows poor communication of success but, more likely, it shows that there is not much to shout about at these firms and the growth initiatives at many firms are simply not working,” Warren said.

Technology trends such as cloud computing, tablet and smartphone use and the continuing need to maintain data security are affecting the way accountants work.

CaseWare’s survey asked accountants whether advances in technology were making them more flexible, or were having a detrimental effect on their work-life balance.

Just under half of accountants said they do additional work at home for more than an hour a day, despite 62% of respondents not owning a tablet device.

Work-life balance seems to be sable, as 70% of respondents said they never missed family commitments.

The full report is available to download for free from the CaseWare website

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